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Income Taxes (Tables) | 12 Months Ended
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May 31, 2018
Income Tax Disclosure [Abstract] |
Income (Loss) before Income Taxes | Income (loss) before income taxes as shown in the Consolidated Statements of Income is summarized below for the periods indicated.
Year Ended May 31, |  | 2018 |  |  | 2017 |  |  | 2016 |
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 228,976 |  |  | $ | 133,356 |  |  | $ | 310,695 |
Foreign |  |  | 188,072 |  |  |  | 110,977 |  |  |  | 172,771 |
Income Before Income Taxes |  | $ | 417,048 |  |  | $ | 244,333 |  |  | $ | 483,466 |
Provision (Benefit) for Income Tax | Provision (benefit) for income taxes consists of the following for the periods indicated:
Year Ended May 31, |  | 2018 |  |  | 2017 |  |  | 2016 |
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | 27,206 |  |  | $ | 3,024 |  |  | $ | 75,200 |
State and local |  |  | 8,617 |  |  |  | 5,115 |  |  |  | 6,230 |
Foreign |  |  | 52,658 |  |  |  | 27,474 |  |  |  | 35,179 |
Total Current |  |  | 88,481 |  |  |  | 35,613 |  |  |  | 116,609 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
U.S. federal |  |  | (8,054 | ) |  |  | 15,553 |  |  |  | 17,625 |
State and local |  |  | 4,832 |  |  |  | 1,928 |  |  |  | 1,907 |
Foreign |  |  | (7,468 | ) |  |  | 6,568 |  |  |  | (10,133 | )
Total Deferred |  |  | (10,690 | ) |  |  | 24,049 |  |  |  | 9,399 |
Provision for Income Taxes |  | $ | 77,791 |  |  | $ | 59,662 |  |  | $ | 126,008 |
Significant Components of Deferred Income Tax Assets and Liabilities | The significant components of deferred income tax assets and liabilities as of May 31, 2018 and 2017 were as follows:
|  | 2018 |  |  | 2017 |
(In thousands) |  |  |  |  |  |  |  |
Deferred income tax assets related to: |  |  |  |  |  |  |  |
Inventories |  | $ | 12,491 |  |  | $ | 14,207 |
Allowance for losses |  |  | 5,349 |  |  |  | 9,148 |
Bankruptcy note liability |  |  | - |  |  |  | 37,850 |
Accrued compensation and benefits |  |  | 14,812 |  |  |  | 26,277 |
Accrued other expenses |  |  | 14,427 |  |  |  | 21,935 |
Other long-term liabilities |  |  | 15,921 |  |  |  | 19,947 |
Net operating loss and credit carryforwards |  |  | 52,687 |  |  |  | 89,977 |
Net unrealized loss on securities |  |  | 10,236 |  |  |  | 24,300 |
Pension and other postretirement benefits |  |  | 39,863 |  |  |  | 68,352 |
Total Deferred Income Tax Assets |  |  | 165,786 |  |  |  | 311,993 |
Less: valuation allowances |  |  | (51,540 | ) |  |  | (63,686 | )
Net Deferred Income Tax Assets |  |  | 114,246 |  |  |  | 248,307 |
Deferred income tax (liabilities) related to: |  |  |  |  |  |  |  |
Depreciation |  |  | (62,202 | ) |  |  | (81,965 | )
Amortization of intangibles |  |  | (114,284 | ) |  |  | (149,546 | )
Unremitted foreign earnings |  |  | (19,886 | ) |  |  | (94,430 | )
Total Deferred Income Tax (Liabilities) |  |  | (196,372 | ) |  |  | (325,941 | )
Deferred Income Tax Assets (Liabilities), Net |  | $ | (82,126 | ) |  | $ | (77,634 | )
Reconciliation of Income Tax Expense (Benefit) Computed by Applying U.S. Statutory Federal Income Tax Rate against Income (Loss) before Income Taxes to Provision (Benefit) for Income Taxes | The following table reconciles income tax expense (benefit) computed by applying the U.S. statutory federal income tax rate against income (loss) before income taxes to the provision (benefit) for income taxes:
Year Ended May 31, |  | 2018 |  |  | 2017 |  |  | 2016 |
(In thousands) |  |  |  |  |  |  |  |  |  |  |  |
Income tax expense at the U.S. statutory federal income tax rate |  | $ | 121,812 |  |  | $ | 85,517 |  |  | $ | 169,213 |
Impact of foreign operations |  |  | (16,276 | ) |  |  | (20,156 | ) |  |  | (29,969 | )
State and local income taxes, net |  |  | 9,520 |  |  |  | 4,734 |  |  |  | 4,310 |
Domestic manufacturing deduction |  |  | (4,839 | ) |  |  | (2,537 | ) |  |  | (8,030 | )
Nondeductible business expense |  |  | 2,473 |  |  |  | 2,394 |  |  |  | 2,224 |
Valuation allowance |  |  | (5,235 | ) |  |  | 933 |  |  |  | (3,357 | )
Deferred tax liability for unremitted foreign earnings |  |  | (77,970 | ) |  |  | (621 | ) |  |  | (3,712 | )
Non-taxable gain from joint venture |  |  | - |  |  |  | - |  |  |  | (2,790 | )
Other |  |  | 737 |  |  |  | 1,476 |  |  |  | (1,881 | )
Equity-based compensation |  |  | (4,652 | ) |  |  | (12,078 | ) |  |  |  |
Transition tax liability |  |  | 67,899 |  |  |  |  |  |  |  |  |
Remeasurement of U.S. deferred income taxes |  |  | (15,678 | ) |  |  |  |  |  |  |  |
Provision for Income Tax Expense |  | $ | 77,791 |  |  | $ | 59,662 |  |  | $ | 126,008 |
Effective Income Tax Rate |  |  | 18.7 | % |  |  | 24.4 | % |  |  | 26.1 | %
Activity Related to Unrecognized Tax Benefits | Uncertain income tax positions are accounted for in accordance with ASC 740. The following table summarizes the activity related to unrecognized tax benefits:
(In millions) |  | 2018 |  |  | 2017 |  |  | 2016 |
Balance at June 1 |  | $ | 13.2 |  |  | $ | 13.7 |  |  | $ | 12.9 |
Additions based on tax positions related to current year |  |  | 5.1 |  |  |  | 0.2 |  |  |  | 0.3 |
Additions for tax positions of prior years |  |  | - |  |  |  | 2.9 |  |  |  | 2.6 |
Reductions for tax positions of prior years |  |  | (4.5 | ) |  |  | (3.2 | ) |  |  | (1.4 | )
Foreign currency translation |  |  | 0.3 |  |  |  | (0.4 | ) |  |  | (0.7 | )
Balance at May 31 |  | $ | 14.1 |  |  | $ | 13.2 |  |  | $ | 13.7 |

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